< His basic point is well made. That Australia is a success, that it owes its success to its own efforts, and that both sides of politics – Labor and Liberal – have crafted it between them. >

Yes Graham, but what about the future?

Our whole economy is built on a house of cards - totally dependent on fossils fuels, and at a price that cannot be too much higher than at present without having major impacts. And we’ve got to dig up our primary resources and flog them off at an ever greater rate, just to stay still in economic terms and terms of quality of life for Australian citizens, not least because both Labor and Liberal insist on us having absurdly high immigration / population growth.

Does Hartcher entertain any thought at all for the imperative of developing a sustainable society?

Wasn’t Australia Day an ideal time for reflection on how we are (not) proceeding towards this all-important goal?

Self-congratulation is a dangerous activity. Even accepting the flattery of other countries is a distraction.

We should take note of the fates of previous "miracle" economies.

The US believed its own publicity, and embarked on a borrow-and-spend spree whose immediate effects will be felt for decades to come, and whose long-term impact could well be a permanent reduction in their global political influence.

Ireland owed its "Celtic Tiger" reputation to massive inward capital investment and liberal funding from the EU, which served to inflate its property prices until they hid the underlying fragility of the "working economy". When these slowed - as they inevitably would - the collapse was quick, and nasty.

Japan, at the height of its "miracle" status allowed property prices to escalate to the point where Tokyo real estate exceeded US$200k per square metre.

http://www.housingjapan.com/2011/11/10/a-history-of-tokyo-real-estate-prices/

While it is easy to point the finger at real estate alone, government actions, intended to spread the prosperity more uniformly across the economy, only exacerbated the situation.

It is tempting to wallow in the praise of others and bask in the sunshine of our good fortune, but we should avoid doing so.

I'd vastly prefer our tendency for pessimistic, small-c conservative economic management to continue, and that we close our ears to the siren song that "we've never had it so good".

Anyone else remember Harold Macmillan?

"Mr Macmillan told Tory supporters: 'Go around the country, go to the industrial towns, go to the farms and you will see a state of prosperity such as we have never had in my lifetime – nor indeed in the history of this country.'"

That was in 1957. It was all downhill from there, until a brief resurgence in the eighties and nineties. Then once again a blind fiscal carelessness, born of unprecedented prosperity and a feeling that the economy was invincible, came into play.

Graham exhorts us:

"Now that Hartcher has stated the facts it behoves everyone who cares about Australia should be talking them up."

I disagree. Now is the time to be on our guard against any form of hubris whatsoever.

AUSTRALIA DAY?? GILLARD SHOULD APOLOGISE

For her crappy form. A PM Minister who can't keep her feet in a riot deserves to stand down.

Planta

I thought Hartcher's book was very good but like Graham, felt it needed more graphics and citations. But I'm mindful Hatcher is a journo.

I thought it good medicine against the naysayers. We too often forget that Hawke & Keating and Howard and Costello pretty much got it right re economic fundamentals.

I have a few more concerns about social Australia and tension in the polity re Aboriginal affairs (an sore which has gone on far too long) as well as serious design - or no design - in urban planning.

I haven't read the book, but this sounds a bit simplistic. On the dominance of mining, mining exports in 09-10 were $128 billion; the nearest competitor was manufacturing at $29bn. This imbalance is set to increase, and 2014-15 predictions are for $172bn and $33bn respectively.

See http://anthillonline.com/ibisworld-reveals-top-aussie-export-industries-for-2010/

From this perspective, there would seem to be a big problem of eggs and baskets. It would be foolish of any government not to try to spread the benefits more broadly (though there would be many ways of doing this: wealth fund; social investment; education etc).

One of the things we've learned over the period Graham refers to is that the trickle down effect is a very poor mechanism for improving welfare for all.

A good article - compared to almost all other developed countries, Australia's economy is performing very well.

Godo

Yes, exports have risen to a large proportion of Australia’s exports. What do you suggest, that the government bans mining exports? How could that advance our economic wellbeing?

And the article makes no mention of “trickle down”, for good reason – that is not how the benefits of economic growth are distributed.

Once upon a time far far away, there's this ship called Australis at voyage on the global seas.

It becomes infested with rats from all the ports it reaches

The rats start eating the timbers and saying how good life is and define 'UnAustralis' to mean those original ship mates who become concerned the ship will sink.

The rats invent Australis day to increase SPENDING so the Business and commerce rats can get fat, powerful and have more wives, mistresses, pleasure and babies. Soon Australis day becomes a POWER point where rich rats find excuses to exert influence and power over more sober and concerned citizens.

But just as the rats are considering a law to make Unaustralisism a criminal offence, the timbers are breached by gnawing teeth & the ship starts to sink.

The rats all abandon ship and swim for the good ship NewZealis.

The original australis citizens caulk the leaks and get back to green , sustainable and prosperous ways.

On the very next Australis day, the rats see the recovery and demand to come back ... The UN says Australis is obliged to take them back and that Australis is the worst country in the developed world if it doesn't.

At this point the hard earned wisdom of the Australis citizens shows itself with pride and spirit on THEIR AUSTRALIS DAY as they give the rats and the UN the one-fingered salute.

Sometimes even hindsight offers less than perfect wisdom
Hartcher and Young aver that events have 'proven' the policies of Hawke- Keating and Howard-Costello to be correct. It's certainly true that they dragged our country kicking and screaming into following the neo liberal policies of Thatcher and Reagon, albeit a few modest steps behind.
I suspect it was more the 'kicking and screaming', than the dragging which has made us comparatively successful, and we still have time to catch up; which we most certainly will do if we don't start learning from the mistakes of others.

I think Graham is trying to be optimistic in a sea of Global despair.

Currently I'm getting feedback from Canada which has a similar economy to us.They are rich in resources/energy like us but wages are half ours and living costs in some food items such as and beef/chicken higher.Ordinary folk are doing it really tough and the Americans are worse off.

We don't have a miracle economy.Aussies do work hard long hours,but our saviour is China whom we sell vast amounts of resources/energy to.John Howard also retired Labor debt and left us with a surplus.

The real devils in this whole GFC crisis is the Private Central Banks like the US Federal Reserve and their banking parasites.US Govt debt of $15 trillion is = to their GDP.Ron Paul with a partial audit of the Fed found an additional $16 trillion in off balance sheet loans( ie money created from nothing) and loaned out to institutions all around the planet.This money created from nothing,ie $31 trillion will eventually cause hyper-inflation.Some of this money was loaned to our Banks here.The Syd Morning Herald through the freedom of information act tried to find out how indebted our banks are.The Gillard Govt denied this request on the grounds of national security.

When we allow private banks the power to create from nothing all the money to equal increases in our productivity + inflation,then loan our productivity back to us as debt,then we and our Govts become slaves to this system.That is the reality which we see happening in thoughout the West.

Australia is a success, unfortunately many who call themselves proud Australians are hellbent on ruining it all.

Howard did nothing in all the years he was PM. Just the ridiculous GST and punishing the poor.

Pensions did not rise in real terms for the entire time he was in office so why do you claim that he made life better for the poor.

No mention of credit growth...not relevant to economics.
More rocks chucked over the fence at the "other side"...yawn.

The ridiculous GST ?
It's the ridiculous GST that has kept this country afloat despite Labor's untiring attempts to sink it.
The GST has literally saved Australia & was probably the single most factor that Labor looked as though they got Australia through the GFC. It was the coffers filled by the GST that got us through not the gang that so hypocritically claims to have done.
So, before you ridicule this much maligned yet even more dependent upon Tax think that you're living in a very good country because of it. As for myself I believe it can even be improved by a flat tax. Unfortunately, many people don't want improvement they're much happier seeing it all go down the drain.

I often wonder how you manage to get it so wrong, so often, Arjay.

>>Currently I'm getting feedback from Canada which has a similar economy to us.They are rich in resources/energy like us but wages are half ours...<<

Half, Arjay? Nonsense.

Our average household income has been at the same level as Canada's for years. Depending on the strength of the currencies, sometimes they are "ahead", and sometimes we are. According to the ABS ours presently sits around the A$44k mark, and according to Statistics Canada, theirs is around C$47k.

Do you check anything before you write? Ever?

I know it is a fruitless request, but is there a chance that you could, one day soon, start to educate yourself about the fundamentals of economics? Nah, thought not. So I guess we'll have to put up with this stuff for a while longer...

>>Ron Paul with a partial audit of the Fed found an additional $16 trillion in off balance sheet loans( ie money created from nothing) and loaned out to institutions all around the planet.This money created from nothing,ie $31 trillion will eventually cause hyper-inflation<<

Almost everything in this sentence is completely wrong. Here's the Audit you mention:

http://www.scribd.com/doc/60553686/GAO-Fed-Investigation#outer_page_1

Perhaps you could be so kind as to point out the "$16 trillion", and also indicate in what sense it can be described as "off balance sheet"?

I know you are unaccustomed to actually reviewing source documents, but maybe you could make an exception on this occasion?

As an encore, likely to be in the order of a reverse one and a half somersault dive with three and a half twists, please explain how it was "created from nothing", and to finish with a flourish, how it will "cause hyperinflation".

That should keep you busy for a while.

Once again we find ourselves trudging barefoot over the same stony ground.
Here's a nice little vid by Ben Dyson of “Positive Money” UK.

http://youtu.be/JBZWw1DG8zU

To summarise, I believe Arjay is referring to the 97% of all M4 money created by private banks as debts.
In fairness, I think it should be stated that banks don't 'create' this money, but rather facilitate the creation of this money by accepting guarantees; from unsecured lending guarantees to mortgage guarantees to govt tax guarantees (most favoured) to international bank/investor guarantees. When a significant number of these guarantees prove to be ill advised or outright fraudulent... Well, it wasn't that long ago.
The obscenity is that the most successful players in this game have no intention, and never have had any intention of honouring these guarantees. They simply roll them over year after year, secure in the knowledge that lesser players will fall on their behalf.

I don't think so, Grim, he doesn't get off the hook that easily.

>>To summarise, I believe Arjay is referring to the 97% of all M4 money created by private banks as debts.<<

That does not square with his statement that:

>Ron Paul with a partial audit of the Fed found an additional $16 trillion in off balance sheet loans( ie money created from nothing) and loaned out to institutions all around the planet<<

The implication is that it was "the Fed" who created this "money from nothing". If it were not so, how would they be in a position to lend it out to "institutions all around the planet"?

The question you raise - should banks be allowed to lend money at all - is entirely different.

And who are these "lesser players" who "fall on their behalf"?

G'day Pericles, I'm happy to let Arjay fight his own battles, particularly as I don't always understand his arguments -despite us both apparently agreeing on the need for monetary reform.
The “lesser players” could be categorised in a number of ways: those who pay interest as against those who earn interest like mortgagees, as the bottom line guarantors; small investors, whose sheer (economic) size demands they risk all their eggs in one basket...
As I intimated in my earlier post, for the past few decades at least the lesser players and fall guys have been tax payers. Strangely, for a nominally democratic society, we have arguably even less say in how our tax dollars are spent than corporate shareholders.
Can you imagine the American people being asked a referendum style question, like:

“Would you approve of your tax dollars being committed to bailing out and paying bonuses to the very people who caused the crash of 2008?”

Or how about:
“Would you agree the fairest and most sensible course would be to hand all our money to the King of the Thieves (let's call him 'Morgan', after the pirate), as he is most qualified to organise the distribution of said funds amongst all the other thieves, and further that we should pay him a hefty bonus as recompense for all the work involved in said distribution; such bonus being above and separate to the funds he 'distributes' unto himself?”

Getting back to the article in question, although not a great fan of Rudd or the Labor Party I still believe his strategy of giving bailout funds to people who had to spend the money back into circulation, rather than to banks to 'shore up their position' (and pay bonuses), was a good one.